Treasurer Frydenberg’s election-year Budget featured a range of temporary measures to assist businesses through tax-related incentives.
With unemployment levels at an equal 48 year low, and a substantially stronger than anticipated bottom line to Australia’s net debt levels forecasted, Treasurer Josh Frydenberg’s 2022 budget focused on providing targeted support to individuals and businesses as they continue to emerge from the pandemic.
“The largest and fastest improvement to the budget bottom line in over 70 years,” Frydenberg said.
“We have drawn clear lines. Banking the dividend of a stronger economy, ending economy wide emergency support.
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“Repairing the budget without increasing taxes.”
$1.55 billion handed to small businesses investing in skills and tech
One of the budget’s major highlights for SMEs was the announcement of a new tax deduction scheme, designed to reward businesses investing in skills and technology.
Under the new scheme, which is estimated to cost the Government $1.55 billion over four years, for every $100 spent by a small business on training employees or investing in digital technologies such as cloud computing, e-invoicing, cyber security and web design will see them receive a $120 tax deduction.
“No one knows better than a small business owner what skills they need in their employees,” the Treasurer said.
The Treasurer capped investments covered by the scheme at $100,000 per year, and described the boost as an opportunity for businesses to become “more productive”, and an incentive for those “embracing the digital revolution”.
The window for claiming this additional tax deduction will begin as of now and will end on June 30, 2023 for technology investments and June 30, 2024 for staff training.
In order to be eligible, the training courses are required to be delivered by external providers registered in Australia, and the technology deduction applies to business expenses and depreciating assets that support the adoption of digital solutions such as portable payment devices and subscriptions to cloud-based services like MYOB.
Greater access to cashflow through instant write-offs
In addition to digital and skills tax boost, the 2022 federal budget also introduced rules to allow businesses with annual turnover or total income less than $5 billion to instantly write-off assets to strengthen business investment and create more jobs, extending them to 30 June 2023.
The budget also enabled companies with annual turnover less than $5 billion to offset losses against previously taxed profits to generate a refund and extended it to include the 2022-23 income year.
More businesses will be able to access some of the Government’s key tax concession schemes through the increase of their annual turnover threshold requirement, moving them from $10 million to $50 million.
Less pinch at the pump (for now)
To address the skyrocketing oil prices, Frydenberg has announced that his Government will temporarily reduce fuel excise tax by 50 percent over the next six months, a move that will reduce the cost of petrol for motorists by 22 cents per litre.
“Whether you’re dropping the kids at school, driving to and from work or visiting family and friends, it will cost less,” he said.
“The competition watchdog will monitor retailers to make sure these savings are passed on in full.”
The drop in fuel excise is expected to hit the bowser within two weeks and will likely cost the budget bottom line billions of dollars over the course of the six-month period.
MYOB is a leading business platform with a core purpose of helping more businesses in Australia and New Zealand start, survive and succeed. At the heart of MYOB is a customer base of 1.2 million businesses and a network of more than 40,000 accountants, bookkeepers and consultants, for whom MYOB delivers end-to-end business and accounting solutions. MYOB operates across four key segments: Small and Medium Enterprises (SME), Enterprise, Financial Services and Practice.